Exercise 4. Match the verbs/verbal phrases, prepositions (if necessary) and noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.

UNIT FOUR

Factors of Production

ESSENTIAL VOCABULARY

1. Condition n – a favourable or unfavourable state of something – умова, стан. Business conditions – ділова/господарська кон’юнктура, financial conditions – фінансовий стан/фінансові умови, market condition(s) – ринкова кон'юнктура.

2. Effort n – an expense of strength and energy to achieve a desired end – зусилля, намагання. To make an effort – докласти зусилля, намагатися, to put an effort in/into something – вкладати зусилля. Syn. an attempt.

3. Failure n – a lack of success – невдача, банкрутство, провал. Business failure – банкрутство підприємства.

4. Income n – money of all kinds received by a person or organization in a year from work, investment, rent, etc. – прибуток, дохід. Syn. a profit, a return.

5. Input n – a resource required by a firm to enable it to produce goods and services – запроваджений фактор виробництва. Human input – людські затрати.

6. Means n – something that enables a purpose to be fulfilled – засоби. Means of production – all goods that are made with the purpose of using them to produce other goods – засоби виробництва. Syn. capital goods.

7. Own v – to have as property – володіти. Syn. to have, to possess.

8. Payment n – the sum of money paid – платіж, сплата. To make payment – здійснювати платіж. Syn. a pay.

9. Raise v – to increase the amount, size, value – підвищувати, збільшувати. To raise funds / money / capital – добувати (отримувати) гроші (капітал). Syn. to go up, to increase.

10. Risk n – a chance or possibility of suffering loss, danger, injury, etc – ризик. At one's own risk –на свій страх та ризик To assume/take/a/the risk(s), to risk – ризикувати, наражатися на ризик. Syn. a hazard.

11. Reward n – something given or received for service, effort, or achievement – винагорода. Syn. a compensation.

Text

Economic resources are scarce relative to the limitless needs and wants of people and businesses operating in the economy. It is important to use these resources efficiently in order to maximize the output that can be produced from them.

They are combined in various ways to produce goods and services. Since these resources go into the creation of goods and services, they are called the factors of production. Each factor of production has a place in the national economy, and each has a particular function.

Traditionally, economists have noted four factors of production: land, labour, capital, and entrepreneurship.

ü Land or natural resources are the things provided by nature such as soil and minerals that are used in the creation of products. The price paid for the use of land is called rent.

Some nations are rich in natural resources and develop this by specializing in the extraction and production of these resources, for example, the development of the North Sea oil and gas *.

Air, sunshine, rainfall are classified as free goods since consumption by one person does not reduce their availability for others – free goods do not have an opportunity cost. One major resource is for the most part free – the air we breathe. The rest are scarce, because there aren’t enough natural resources in the world to satisfy the demands of consumers and producers.

ü Labour is the human input into the production process. Economists distinguish between the physical and mental efforts that people put into the creation of goods and services. The price paid for the use of labor is called wages. Wages represent income to workers, who own their labour *.

Not all labour is of the same quality. Some workers are more productive than others because of the education, training and experience they have received. The amount of labour will depend ultimately on the population of the country (or the world, if people can immigrate), and on the number of people who are available to work. Those in school, those retired, too handicapped to work *, mothers who stay at home with their children are not part of the labour force.

ü Capital goods or capital as it is commonly called are man-made goods (or means of production) which are used in the production process. Capital or physical capital refers to the machinery, tools *, roads, factories, and buildings which individuals have produced in order to produce other goods and services. A modern industrialized economy possesses a large amount of capital, and it is continually increasing. Increases to the capital stock * of a nation are called investment. Investment is important for the economy to achieve its economic growth.

To an economist, capital has another meaning. It is the finance raised to operate a business whereas business people refer capital to money they can use to buy factories, machinery and other similar productive resources. Payment for the use of someone else’s money, or capital, is called interest.

So, economists distinguish between physical and financial capital.

ü Entrepreneurship is the willingness of business owners to take risks of introducing new products and services to the market. It is the managerial or organizational skills needed by most firms to produce goods and services. Because of its essential role in initiating the process of production, entrepreneurship is determined by some economists as a "fourth factor of production," along with land, labour and capital. Entrepreneurs are people who bring together the other three productive resources to make goods and services. The success or failure of a business often depends on the quality of entrepreneurship.

The reward to entrepreneurs for the risks, innovative ideas and efforts that they have put into the business are profits, whatever remains after the all production costs have been met, in other words, entrepreneurs make their payments to the owners of land, labor and capital.

ü Today, information is identified by economists as the fifth factor of production because it has become vitally important nowadays. Information means facts and figures about markets and competition that are often stored on computers and are accessible immediately. This is a computer age, and business cannot compete without information about markets, financial and other important business conditions.

COMMENTS

the development of the North Sea oil and gas – розробка покладів нафти та газу в Північному морі;

who own their labour – хто володіє своєю робочою силою;

too handicapped to work – ті, хто мають занадто великі фізичні або розумові вади, щоб працювати; ті, хто не можуть працювати через занадто великі фізичні або розумові вади;

tools – знаряддя (праці);

the capital stock – основний капітал/основні виробничі фонди.

Exercise 1. Read, translate into Ukrainian in written form and learn by heart the definitions of the following economic terms and concepts.

1. Capital: something created to produce other goods and services; also money used to pay for the operation of a business.	__________________________________________________________________________ _____________________________________ _____________________________________
2. Entrepreneur:a person who creates a business in the hope of earning a profit; also a person, who organizes, manages and assumes the risk of a business enterprise.	_____________________________________ _____________________________________ _____________________________________ __________________________________________________________________________
3. Entrepreneurship:the mana-gerial or organizational skills needed by most firms to produce goods and services at a profit.	_________________________________________________________________________ _____________________________________ _____________________________________
4. Factors of production:the productive resources of land, labour, capital and entrepreneurship that go into the production process.	_____________________________________ _______________________________________________________________________________________________________________
5. Information:facts or details that tell something about the person, situation, event etc.	_______________________________________________________________________________________________________________
6. Interest:payment for using someone else’s money; income derived from allowing someone else to use one’s money.	___________________________________________________________________________________________________________________________________________________
7. Investment:the use ofmoneyto get a profit or to advance in business activity.	_____________________________________ _____________________________________ _____________________________________
8. Labour:the human efforts required to produce goods and services.	__________________________________________________________________________ _____________________________________
9. Land:the gift of nature in the form of useful materials of all kinds in or on the earth, including surface space, soil, rocks, minerals, water, wind and weather.	____________________________________________________________________________________________________________________________________________________ _____________________________________
10. Rent:return paid to those who supply the factor of production known as land.	_____________________________________ __________________________________________________________________________
11. Wages:the price paid for the use of labour. (To the economist, the term refers to the nation’s wealth paid to labour, as distinct from other forms of income – rent, interest, and profit).	______________________________________________________________________________________________________________________________________________________________________________________________________________________________

Exercise 2. Give the Ukrainian equivalents for the following.

1. the limitless needs and wants __________________________________________

2. the national economy ________________________________________________

3. the extraction and production __________________________________________

4. air, sunshine, rainfall are classified _____________________________________

5. to distinguish between the physical and mental efforts ______________________

____________________________________________________________________

6. the amount of labour _________________________________________________

7. man-made goods ____________________________________________________

8. a large amount of capital _____________________________________________

9. to achieve economic growth __________________________________________

10. the willingness of business owners _____________________________________

11. its essential role ____________________________________________________

12. to bring together ____________________________________________________

13. to become vitally important ___________________________________________

14. facts and figures ____________________________________________________

15. business cannot compete without _______________________________________

Exercise 3. Find the English equivalents for the following.

1. створення товарів та послуг _________________________________________

2. певна функція _____________________________________________________

3. речі, які надаються природою ________________________________________

4. решта – рідкісні ___________________________________________________

5. вільний товар _____________________________________________________

6. такої ж якості _____________________________________________________

7. освіта, підготовка та досвід __________________________________________

8. ті, хто на пенсії (за віком) ___________________________________________

9. засоби виробництва ________________________________________________

10. сучасна промислово розвинена економіка ______________________________

11. на думку економістів _______________________________________________

12. схожі виробничі ресурси ____________________________________________

13. управлінські або організаційні уміння _________________________________

14. бути доступним ____________________________________________________

Exercise 4. Match the verbs/verbal phrases, prepositions (if necessary) and noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.

1.	to maximize		the creation
2.	to go	between	other productive resources
3.	to be rich	to	a business
4.	to distinguish	into	the population
5.	to depend		the business
6.	to refer		the output
7.	to operate	in	the machinery
8.	to bring together	on	the physical and mental efforts
9.	to put		natural resources

Exercise 5. Match these nouns/noun phrases, prepositions (if necessary) and nouns/noun phrases as they occur together in the text. Translate the expressions they make into Ukrainian.

1.	the amount		entrepreneurs
	2.	production	about	owners
3.	the reward		a business
4.	information	of	labour
5.	the owners		land
6.	the failure	to	markets
7.	business		process

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